The predicted flow-on effects of tort reform have allowed CGU to cut commercial public liability rates by 10% in NSW, Queensland, SA, the NT and the ACT.

CEO Mario Pirone says even though he expects tort reform to take several years to have an effect on public liability claims, “we’ve decided to act now in anticipation of the community benefits we believe will result from these important reforms”.

The announcement follows CGU’s decision in July to reduce commercial public liability rates by 10% in Victoria, WA and Tasmania.  

Mr Pirone says CGU has begun to see a reduction in the frequency of small claims and it hopes to see further benefits of tort reform in the next 12 months, with more substantial results in about three years.

The announcement of lower premiums “is the culmination of a series of pricing changes we introduced in July 2003 when we froze commercial public liability rates”.

“Since then, we have also been able to absorb the impact of inflation and rising costs associated with long-term disablements and care. Without tort reform, these rising costs would have made it necessary to further increase premiums.”

He says the CGU approach recognises the importance of passing on the benefits of tort reform to policyholders. “As part of this process, we will regularly review our pricing to ensure it appropriately reflects the cost of providing this important cover.” 

As renewals are generally sent out six weeks in advance, the rate reductions will affect public liability policies due for renewal from early February.